March 10th, 2009
Hon. Minister J. Watson
Ministry of Municipal Affairs and Housing
17th Floor
777 Bay Street
Toronto, Ontario M5G 2E5
Dear Minister J. Watson:
My name is ****** *******. I provide affordable housing in Toronto and Mississauga. I have written this letter to you because soon I will no longer be able to provide this housing which is an integral pillar of the Provincial Government’s Poverty reduction plan.
As a long term provider of quality, lower-cost, rental housing, the only way I see this need being met is with private housing involved. This system is in place in abundance in the United States.
Ontario Landlords providing this desperately needed housing are being forced out of business on three fronts; Provincial and Municipal regulations and fees, under the present situation it makes no financial sense to invest in private affordable housing and a Residential Tenancies Act that is heavily biased in favor of tenants.
I previously sent Minister Matthews a letter (via my MPP Charles Sousa) giving examples of exactly how the Province and Municipalities (in particular the City of Toronto) are discouraging private affordable housing and why this type of investment makes no financial sense for private investors. I have enclosed a copy of that letter for your information.
This letter to you, deals with specific changes that must be made to the Ontario Residential Tenancies Act, failure to do so will ensure the exodus of many more Landlords who are providing quality affordable housing.
It is a fact that the Ontario RTA is some of the most Landlord adverse legislation in North America. Both American and out of province Canadian Landlords are in disbelief of our RTA.
Below are some examples of problems Landlords face (in particular those with low-income rentals). While each problem alone may see petty to an outsider, I know first-hand that the cumulative total is such that it is no longer possible for private landlords to provide housing they can be proud of in the low cost rental market, and to make a profit that is comparable to other investments.
The RTA fails in two ways. It does not protect Landlords or their properties. It gives tenants preferential treatment.
The Residential Tenancies Act does not adequately protect Landlords and their properties.
Problem 1: The RTA allows a tenant to move anyone into the apartment permanently. The new occupant does not even have to give his/her name to the landlord. Under the RTA, the landlord can ASK the occupant for identification, but the occupant does not have to give ANY information.
If the original tenant moves out, the remaining occupant must be formally evicted and all the procedures and regulations of the Residential Tenancies Act must be followed. This is true even if the Landlord never accepted any rent payments from the remaining occupant.
The landlord is at a complete disadvantage and doesn’t even know the tenant’s name to write on the eviction notice. Even if an occupant has no proof that he/she is a bonafide tenant, police will not get involved. The Landlord must file for an eviction of an unauthorized occupant with the LTB. The LTB tells me it can take several weeks just to get a hearing and many more weeks for the occupant to actually leave!
This is from an actual phone call I had with the Ontario Landlord Tenant Board.
I wanted to know how to deal with a situation where a tenant moves in her unauthorized boyfriend, has a fight with him and then moves out, leaving him in the apartment.
The following is almost word for word.
Me: I'm a small LL in Toronto. I have signed a lease with a single tenant; she is listed as the only occupant on the lease. Her boyfriend has moved in. What are my rights??
Them: He is allowed to move in.
Me: can I ask him for his name and ID.
Them: yes you can ask.
Me: what happens if he does not want to give the info?
Them: he does not have to
Me: What happens if she moves out and he stays?
Them: You can file for eviction of an unauthorized occupant.
Me: how do I file and serve the papers if I don’t know his name?
Them: "that’s a good question" You can serve her with the notice.
Me: she has already left, she doesn’t live there anymore. And you have told me in earlier calls that once the tenant leaves the apt, the landlord tenant board has nothing to do with the matter anymore.
Them: I've been here 7 years and I don’t have an answer.
Me: Well it happens all the time, don’t you think it should be addressed in the residential tenancies act?
Them: (in a huffy voice) well it isn’t, call your Mpp to change it.
Me: thank you, that’s what I thought.
That was not a Laurel and Hardy comedy routine.
That was from a phone call I had with the Ontario Landlord Tenant Board at about 11:10 am July 31s/2008t.
Problem 2: The RTA gives the tenant the right to allow NUMEROUS occupants to move in permanently. The only restriction on the amount of occupants is under the municipal bylaws. (However these laws can not be realistically enforced).
Excess occupants cause wear and tear on the property. In addition, the Landlord is providing a greater overall value by providing services to more individuals. The Landlord’s overall operating costs including maintenance and labor increase, especially where the landlord is paying for some or all of the utility costs. Extra occupants also increase garbage disposal costs, which the City of Toronto has just dramatically increased. The Landlord should receive greater financial compensation and should not have to apply to the LTB for an above the guideline rent increase.
Excessive occupants disturb the quiet enjoyment of the premises by other tenants; especially in a multi residential building. This causes good tenants to leave, turnover is higher and costs escalate.
In theory, the landlord can file for eviction if the other tenants are disturbed, but the reality is the eviction is not likely to be upheld.
In many areas outside of Ontario, only the tenants listed on the lease are allowed to reside in the property. If a tenant brings in one or more unauthorized occupants, they are required to correct the situation, or they can be evicted. Additional occupant(s) can either move out or pay a higher rent as per the lease requirement.
Problem 3: Tenants do not pay a damage deposit. There is no incentive for them to look after their apartments during their stay or clean it when they leave. In theory, if a tenant damages the property and the landlord discovers the damage in time, the landlord can take a tenant to Small Claims Court.
Again this is not realistic. If a landlord takes a tenant to small claims court during a tenancy, (or tries to use the RTA to assist in cost recovery of the damages), the tenant will usually become angry and hostile. They can victimize the landlord in many ways, including fraudulent claims of poor maintenance, thefts, sexual assault, vandalize the property, and in a multi unit apartment building, they can upset other tenants with lies and gossip.
If the landlord waits until the tenant leaves, they could sue the tenant in small claims court (in theory). However, tenants don’t have to give a forwarding address, so the landlord can not serve the court’s papers.
In both cases, either the new tenants pay for the damage through increased rents, or more likely, the landlord has to absorb the costs. This discourages landlords from renting to lower-income groups.
Again, in many areas outside of Ontario, a damage deposit must be paid. This deposit is refundable to the tenant, within 30 days of vacancy (minus any itemized damage costs).
This policy also requires the tenant to give a valid forwarding address and contact info. This in itself increases the likelihood of the property being more carefully treated by the tenant.
Problem 4: Tenants do not pay a pet deposit. Tenants are allowed to have as many pets as municipal regulations allow. This may be 3 dogs in a bachelor apartment. Again, the landlord can not recoup any damage costs, and the tenant has no incentive to look after the property. The Landlord has to pay for the pet related costs; potentially thousands of dollars in damage as carpets, hardwood floors, doors and trim often have to be replaced.
At the end of the residency, the landlord will probably loose and additional month’s rent because they can not even begin to show the apartment to new tenants until the damages are repaired. The damages can not be repaired until the pets are gone, at which time the apartment is now vacant, generating expenses, but producing no income.
A landlord is also at a major disadvantage at a LTB hearing, because the RTA allows pets. The adjudicator can simply say that scratched carpets, some sprayed urine, pet odors ect. are “normal wear and tear” when allowing pets.
A ‘pet deposit’ is required in many areas outside of Ontario.
Problem 5: RTA Pet Policy. Landlords are allowed to advertise “No Pets” allowed. But even if a prospective tenant agrees to that condition and sign a lease to that effect, once they move in, the RTA allows them to have pets. The tenant has now increased the landlord’s costs and devalued the property. (Yes its true, try to sell an apartment building with the sounds of dogs barking or the smell of cat urine in the halls).
Further, when other tenants are disturbed by the dog(s) barking, unspayed cat(s) howling or say they are allergic to the pets, they move out; again increasing costs and devaluing the property.
Under the RTA, in theory, a tenant can be evicted if their pet is “dangerous” or disturbs the enjoyment of other residents. However proving this is extremely difficult and will result in more costs to the landlord and a hostile tenant.
Problem 6: Tenants are not required to carry tenants’ insurance. This is true even if the lease clearly requires the tenant maintain valid insurance. The Residential Tenancies Act does not require tenant’s insurance, so it is not a legal requirement. However, when a tenant causes property damage (particularly in a multi-residential building where several apartments can be involved), the landlord’s insurance cost increases.
As a firefighter for 18 years, most of the fires I have attended were residential and caused by tenants. If a landlord has just one insurance claim, (even though it may have been caused by tenants), the landlords insurance rates will increase dramatically. In fact the landlord may not even be able to get insurance. If a tenant causes a claim, they should be responsible for the costs.
If you rent a $5000.00 car, it is a legal requirement that you have insurance. Why can you rent a property worth hundreds of thousands of dollars, and NOT be required to maintain damage and liability insurance?
Problem 7: No control over open windows. Most low-income tenants live in apartment buildings that provide heat at the landlord’s expense. Under the RTA, tenants can leave their windows open as much as they like. The landlord has no legal recourse. Recently one of my tenants left for Vancouver for 8 days and left her bedroom wide open during -16C weather.
Problem 8: Water costs. Although I have installed low-flow aerators on the tenants’ shower heads and taps, the tenants remove them and install non-water-saving heads. How can the landlord be responsible for paying the water bills and yet have no say or control over water conservation? The RTA does not address this issue, yet this allowance makes a mockery of the Provincial Government’s efforts to conserve utilities.
Problem 9: Air Conditioners. Tenants are not legally required to remove their window air conditioners in the winter. A great deal of heat is lost through these air conditioners. This is an added business expense that the landlord can not control but must pay for--a further deterrent to providing low-income housing.
The effects of dripping condensation from running air conditioners may sound inconsequential, but causes significant problems. Brick and mortar are eroded. Windows, window sills and interior walls are damaged. These must be constantly repaired and real costs are expensive. The dripping water can prevent a tenant on a lower level from being able to open their window. (The Landlord is held blamed, but has no recourse.)
If a tenant wants to install and run an air conditioner, they must be responsible for ensuring the water is diverted away from the building.
Problem 10: The RTA does not require a tenant’s vehicle to be licensed and insured when parked on rental property. This creates a liability for the Landlord. Inoperable cars often leak fluids, and lower a property value. Again the RTA gives the landlord no effective way to deal with this problem. City Bylaws do not deal with uninsured vehicles.
Problem 11: Tenants inviting undesirables onto property and giving them keys and access. The RTA does not hold tenants accountable for their guests.
I have a situation where a tenant occasionally invites individuals of questionable character into the apt building. It is a tenant’s right to invite whomever they wish as guests. However it is my responsibility to provide a safe environment for my tenants. I have no control over who is allowed to “visit” the property. Since this tenant has moved in, we have had two break ins with thefts.
Although I don’t think the tenant was directly involved, I do think they may have (inadvertently) facilitated the events. There is virtually nothing I can do.
Problem 12: Smoking. The RTA allows a tenant to demand compensation from the landlord for having their “quiet enjoyment” of their apt interfered with. This includes second hand smoke from other tenants. However the RTA provides no way for Landlords to realistically hold smoking tenants responsible for creating a situation that interferes with the other tenant’s quite enjoyment rights.
This is true even when the tenant has told the landlord and agreed in the lease that neither they nor anyone else living in the apartment are smokers or will smoke in the apartment.
I have a tenant that every time she opens apartment door, a blue haze of smoke wafts out into the hallway. Under the RTA, this is my responsibility and I am liable for compensation costs.
Problem 13: Smoke/Carbon monoxide detectors, disabling/removing. Unfortunately tenants sometimes disable or remove these detectors.
Fire Departments realize they can not effectively hold the tenants responsible, (for the same reasons Landlords can not usually successfully collect from tenants, even after going to Small Claims court).
Therefore when these devices are missing or disabled Local Fire Departments swiftly punish the landlord with expensive fines and even possible imprisonment. However it is not the Landlord who usually removes or disables these detectors. Tenants must be held accountable by the RTA for their actions regarding these devices.
Problem 14: Landlords are being held responsible for tenants’ outstanding utility accounts. The Provincial Government allows utility companies to hold landlords financially responsible for tenants’ utility debts. This is true even if the tenant has signed a lease with the landlord that clearly stating utility costs are the tenant’s responsibility. It is also true if the tenant has entered into a contract with the utility company to be responsible for the utility cost.
Under the RTA, a landlord can not withhold essential services, heat, hydro, water. It can now be argued that if a tenant is in arrears on their utility bill(s), the Landlord must now pay the utility costs, otherwise the services would be disconnected and the Landlord would be in breach of the RTA. As the landlord is now being held responsible by the RTA and utility companies for these costs and because the Landlord has little hope of collecting the utility costs (which the tenant is now likely to drive up wildly as they are being evicted), the RTA must be amended.
If lease requires the tenant is responsible for some or all of the utility costs and the tenant is in arrears on these utility costs, the RTA must allow for a speedy eviction.
The Ontario Residential Act gives Tenants preferential treatment.
The perception is that landlords are wealthy, greedy and dishonest. Between my full time job and looking after my rental properties, I work an average 60 hours a week.
I have to use income from my full time job to pay the expenses on my rental properties and can only hope that this will pay off in the long term. There are other more profitable, less labor intensive and risky investments readily available.
Landlords provide a vital service that no other levels of government can provide. Yet the RTA favors tenants in both its legislation and rulings.
Just a few examples:
Problem 15: Tenants’ improper notice of termination. Under the RTA, tenants are required to give 60 days’ notice when on a month-to-month or yearly lease. The reality is that few tenants do give this notice and the RTA created this loop hole.
The position of the Landlord Tenant Board is that once a tenant leaves a rental property, he/she no longer falls under the RTA, so the Landlord Tenant Board will not enforce this notice requirement. Again, the landlord can not take the tenant to court for lost rent (due to the improper notice) because the landlord can not find the tenant to serve court papers.
Problem 16: Unfair policies. Whereas the RTA refuses to assist landlords who are victims of tenants leaving with improper notice, the RTA allows for (and provides procedures for) tenants who have vacated a rental property to serve a landlord notice and demand a rent rebate for a poorly-maintained property, up to a full year after the tenant has vacated.
Problem 17: The LTB allows for free legal advice and representation to tenants, but not for landlords. This free service is provided by experienced parties. Small Landlords are often forced to represent themselves and must learn and apply the RTA at the LTB and compete against the tenants more experienced legal counsel.
Problem 18: The RTA allows much cheaper filing fees for tenants. Landlords pay $150.00 (soon to be increased to $170.00) to file a notice of eviction. Tenants only pay $45.00 to file a notice. Whereas a tenant is usually awarded their filing costs when they win (as the landlord is collectable), the landlord is out of pocket as the tenant is not usually collectable.
(Not only is this discriminatory, it is misguided, some of my tenants have a higher salary than I.)
Problem 19: Excessive Leniency. When a tenant fails to make mediated payments, the tenant should be immediately evicted. They are not; instead they are given more chances and more time.
Problem 20: Guaranteed Tribunal Hearings (living rent-free). Under the newly-revamped RTA, tenants are guaranteed a hearing at the Tribunal. This is true even if the tenant has blatantly refused to pay the rent.
Under the new rules, if a tenant contacts the Tribunal and says he/she can not appear on the scheduled hearing date, the hearing is rescheduled for a later date. This can happen numerous times. Meanwhile, the tenant continues to live rent-free in the property while the landlord must still make all his/her required mortgage, property tax, utility and insurance payments.
Problem 21: “Trial by Ambush”. Under the new RTA, at a hearing, the tenant can bring up ANY maintenance deficiency claim. The claim does not have to be valid and the tenant does not have to inform the landlord of their intention [the “deficiency”] prior to the hearing. (Unlike the landlord who must properly deliver all notices of intention to the tenant prior to the hearing).
When the tenant makes a maintenance claim, the landlord can attempt to defend him/herself at the hearing. If he/she is unable to satisfy the adjudicator of the falseness of the claim, the adjudicator can actually make a monetary ruling in favor of the tenant at that hearing. This can and does happen when landlords are trying to evict for non-payment of rent.
If the landlord instead chooses to ask for a new hearing date, so that he/she may properly prepare an argument against the accusations, the tenant continues to live rent-free in the property.
Problem 22: Eviction Process is too long. Landlords are only allowed to collect one month’s rent deposit. But the eviction process will usually takes several months for total vacancy.
If the tenant opposes the eviction, asks for new hearing dates, knows how to delay the system with fraudulent claims and then simply refuses to move (forcing a Sheriff to be hired at the Landlord’s expense), the process can take many months longer. During this time the Landlord not only has to pay the mortgage, insurance, utilities, maintenance and related costs, they ALSO have an angry vindictive tenant who is abusing utilities, likely damaging the property and tormenting the landlord and other tenants in the apartment building.
Again, in theory, the landlord can secure a judgment against the tenant for lost rent and some administration costs thru the RTA, the reality is that little or no money will be collected. Tenants don’t give a forwarding address or contact info. Therefore Landlords have to hire a collection agency.
Many collection companies won’t accept a collection account against a tenant because the probability of collecting is so small. The few companies that do accept such an account often charge 70% of the money collected plus gst!
Since the RTA will only allow a landlord to collect one month’s rent as a deposit (and as there is little chance of collecting any other money owed from the tenant), it is only reasonable that the RTA ensure the eviction can be completed within one month.
Problem 23: The RTA requires Landlords has to store tenants’ abandoned possessions. When a tenant is evicted, the Landlord must store the tenant’s remaining items for 72 hours. This can be costly and time consuming. In some cases the Landlord will have to hire movers and pay for storage. The Landlord is seldom reimbursed for the costs as the tenant is seldom able to be located or collected from.
If a tenant has not made arrangements to take their possessions with them, it should not be the landlord’s responsibility to store and accept responsibility for them. At this point the Landlord is probably dealing already with a large amount of lost rent and a damaged, filthy property.
Problem 24: RTA’s unrealistic ‘allowable rent increases’ procedures: The yearly allowable rent increase doesn’t reflect the rising cost of operating a multi-residential apartment building.
Virtually all costs related to operating, maintaining and repairing a multi-residential rental property, are increasing faster than the allowable rent increase.
While the RTA does allow a landlord to apply for an ‘above the guideline increase’, the application fee is $250.00 (plus an additional fee per apartment). There is no guarantee the increase will be allowed and the rent hike is capped at 3%. In many cases this allowable rent hike would not even cover the cost of the application fee!
Problem 25: “Interpretation guideline #7”. This new, all powerful, legislation has huge negative consequences for landlords; the Adjudicator no longer is required to apply the RTA consistently to each eviction case.
The Interpretational Guideline is discriminatory; it favors tenants by allowing a delay or even cancellation of a previously allowable eviction. While it was conceived with the intent of “fairness”, it has no equal provision of fairness for landlords to expedite an eviction or allowances to over rule the RTA and make an eviction mandatory.
Not only is the guideline unfair, but when it is used and to what extent it is applied is also open to “interpretation”. The following are direct quotes from the RTA:
“The RTA gives little guidance as to when the discretion to refuse should be used.”
“The RTA provides little guidance as to when the Board should use this discretion.“
“ Clause 83(1)(b) does not specify any factors that might be considered, or what period of time might be appropriate for the delay.”
This “interpretational guideline” allows adjudicators to over rule or delay an eviction, for numerous reasons, even when the RTA permits the eviction.
When the RTA allows for the eviction because the tenant is in direct breach of their contractual obligations, (especially rent arrears), the eviction should be upheld.
The RTA holds landlords responsible when they break their RTA obligations, but under the “Interpretation guideline #7” does not apply this same standard to Tenants. Only equal enforcement of the RTA on BOTH parties is consistent, just and reasonable.
Examples of faults with the “Interpretation guideline #7”
1) If a tenant can prove during their eviction hearing their landlord has not applied the RTA consistently when dealing with similar issues with other tenants, (the very same action the “Interpretation guideline #7” allows the Adjudicator), the Adjudicator can delay or stop the eviction, penalizing the landlord.
This is hypocrisy means I must treat a responsible tenant who is seldom late with their rent, exactly the same way as an irresponsible tenant who is consistently late with their rent payment. This will damage tenant/landlord relations and is unfair to both the responsible tenant and the Landlord.
2) A Landlord takes tenant to court for refusal to pay rent. Prior to appearing in court the tenant breaks the lock on apartment entry door, breaks a window, disables their stove or fridge or commits a similar act. At the hearing the landlord proves the tenant is in arrears, but the tenant counters that their apartment has numerous defects and claims they have reported these to the owner. (The RTA now allows a tenant to commit “trial by ambush” by introducing any maintenance issues at a hearing, without the tenant having to tell the landlord first).
Under of Interpretation guideline #7, the adjudicator can stop or delay the eviction until the landlord fixes the problems the tenant created.
This does happen at eviction hearings.
3) Under the Interpretive Guideline #7, an Adjudicator can refuse to evict the tenant unless the Landlord can prove it would cause them undue financial hardship. This is absurd. Unless I can prove to the Adjudicator that my tenant’s non payment of rent will severely jeopardize my financial well being, the tenant can be allowed to remain living rent free in my property. Meanwhile if I steal a $1.00 candy bar, I can be sent to jail and receive a prison record.
4) Landlords are being used as a charity. Under Interpretation guideline #7, (for numerous reasons), the tenant may continue to live rent free while the landlord must still promptly pay all the related costs to own, manage and maintain the property. Although the RTA does have an allowance for the Landlord to claim the additional rental period created by the adjudicator’s over riding of the RTA, the reality is the landlord will never collect this money owed to them. Again the landlord now has a hostile tenant, who is not paying rent, living in their property.
Conclusion:
The unfairness of the Ontario Residential Tenancies Act is legendary. Everyone knows someone who has had a “tenant from hell”. Everyone knows someone who has a Landlord Tenant Board horror story to tell; a friend who lost thousands of dollars and had their rental property thrashed while being a Landlord in Ontario.
While the RTA must balance the rights of both Landlords and Tenants, it has swung too far in favor of tenants. As a result it is hurting the most venerable group it strives to protect, tenants in lower cost private housing, by driving Landlords out of this sector.
If concerns such as:
were negotiated by the Landlord and Tenant prior to signing the lease and the RTA acknowledged the lease as binding, many of the issues would be quickly resolved.
Most private Ontario Landlords instead prefer commercial properties (where leases reflect more reasonable guidelines) or medium to higher end residential rental properties (where tenants tend to have more stable employment and greater equity.)
If you want to provide adequate low-cost rental housing long term, you will have to involve the private sector. It will have to make financial sense for them to invest; the Residential Tenancies Act will have to be adjusted to reflect a real world situation; and various levels of government must have sensible rules and regulations that assist (not hinder) these businesses. Presently none of these requirements are being met, as demonstrated by the shortage of quality lower cost housing.
You have before you, the perfect storm in affordable housing. Eighty percent of affordable housing is at least 40 years old, the demand for this housing is overwhelming (The Region of Peel has a 23 year waiting list, The City of Toronto has a 7 year waiting list), welfare rolls are increasing dramatically and income taxes collected are dropping due to reduced employment and a rapidly slowing economy.
Minister Watson, although it was my passion, like most private providers of decent affordable housing, I do NOT have to invest in this area. There are many other investments that carry less risk, aggravation and provide a superior return. Unless real changes come soon, I will sell my properties and seek better investments, as will many others in this sector. The affordable housing we provide will be lost because these properties will become owner occupied. Owners of remaining affordable rental accommodation will have to upgrade their units and increase rents in order to pay for rising operating costs, fees, taxes and unnecessary expenses caused by the RTA rules. The result will be a continuous erosion of private affordable housing.
I thank you for your time.
Sincerely
CC MPP Charles Sousa, Hon. Deborah Matthews